In another batch of actions, the US state of Nevada’s gaming regulator sued the Coinbase crypto platform for offering unlicensed sports betting contracts. The Nevada Gaming Control Board (NGCB) filed an enforcement action against the crypto firm, pointing out that it offered unlicensed wagers (bets) on sporting events.
The US state allows for sports bets, but platforms should possess the state gaming license to enhance fair betting games, responsible gambling, consumer protections, and age restrictions.
Coinbase’s prediction market did not turn out well
So, how did Coinbase actually offer prediction markets? For the crypto platform, its sport-related contracts are called a prediction market or financial trading, instead of a traditional bet.
The platform executives claim that they secured a license from the Commodity Futures Trading Commission (CFTC), which is, however, not adequate in the eyes of the NGCB, as firms offering sports betting should have a state-owned financial contract.
In brief, according to the gaming regulator, Coinbase is illegally allowing bets on sports outcomes without holding a proper state-backed license. Money is staked based on the outcome of a sporting event, which is equal to sports betting, said the state regulators, based on the law.
However, Coinbase claims its product is financial trading, not a gambling service, and is federally regulated under the CFTC.
Nevada puts temporary shackles on Polymarket
A couple of days ago, the Nevada state court issued a short-term restriction order on Polymarket US, the world’s largest prediction market. Judge Jason Woodbury of the state court imposed a temporary restraining order (TRO) against the prediction market, stating that its event contracts are unlicensed wagers, according to the law.
The court temporarily blocked Polymarket from providing event-based contracts for 14 days, beginning from the day the rule came out.
According to Ash, an X trader, prediction markets are moving into mainstream products; however, their core techniques remain fragile. These markets allow participants to bet on real-world outcomes such as crypto, politics, sports, and culture. But disputes arise as reality becomes messy; market mechanics are weak to fix issues like who decides how something happened or what actually happened.
As more people quickly leap into prediction markets, unclear rules and other governance systems would make the prediction results unfair.
